Laws aim to tighten PSC, utility ethics requirements

A broad bill to strengthen ethics requirements is set to be debated early in the legislative session that starts March 2. The proposals would beef up rules intended to keep the Public Service Commission at an arms' length from the utilities it regulates.

"The goal is to make certain we're not going to have communication between staffers – especially an assistant to a commissioner – and some company of any kind," said Sen. Mike Fasano, R-New Port Richey.

Regulators landed on the hot seat last year for what some said were "cozy" ties with utility employees that become evident while Florida Power & Light's largest rate hike request was pending. Three commission officials, including two who have since resigned, conversed with Florida Power & Light representatives over meals or at a party.

Fasano said his bill aims to stop such conversations. It would require commissioners to behave more like judges.

Gov. Charlie Crist reshaped the commission in October by appointing two people without ties to the commission or the utilities to replace regulators up for re-appointment. He said this week that he supports bills to make the PSC more accountable.

Fasano's bill has cleared one Senate committee and goes to a final one Tuesday. Its next stop: full debate in the Senate. Senate President Jeff Atwater wants that debate on the first day of the legislative session to give the bill a good shot of being approved by both the House and Senate.

"This one is so important that we wanted it to be addressed on the first day to send a signal to the PSC and everyone in government that we have to act with a level of the highest integrity and be up front and transparent in our work for the public," said Atwater, R- North Palm Beach.

Fasano said he is including some recommendations made this week by the PSC in his bill. The bill – one of several addressing issues at the PSC – would:

Beef up law on conversing with utilities. The bill would bar commissioners and their staff members from speaking with utility employees on most regulatory issues unless consumer advocates and other groups were included. Under current law, commissioners can't discuss the merits of issues.

The Sun Sentinel revealed in early September that two commissioners' chief policy advisers exchanged phone calls with an FPL employee and a third occasionally had lunch with utility employees while the rate hike was pending.

Critics say such conversations can give utilities an unfair advantage because most consumers don't have as much access to regulators. Commissioner Nathan Skop likened the situation to someone who is chummy with a judge and later asks the judge to hear his case.

"Make your best case, let it speak for itself on the merits and let's stop all this hands-on stuff," Skop said at a PSC meeting this week.

Improve transparency. Fasano's bill would require the PSC to publish on its Web site any meetings – including informal conversations, phone calls or electronic messages – that commissioners or their staffers have or plan to have with utility officials. Now, only written correspondence and official meetings are documented.

Limit lobbying. The bill would require commissioners and their staff members to wait four years after leaving the PSC before lobbying the legislative or executive branches of government on behalf of groups regulated by the commission.

In September, the Sun Sentinel reported that 18 former regulators and government officials have been hired as Florida Power & Light employees, consultants or lobbyists or work for law firms hired by the utility. Like other major companies, FPL officials say they hire former regulators for their expertise. Regulators-turned-utility advocates have relationships with their former colleagues and insight into the state's oversight strategy.

Create fines for violations. Break the communications rules, and Fasano's bill would set a fine: up to $5,000 for PSC staffers who report directly to a commissioner and for employees of utilities regulated by the commission. Utilities could be fined up to one-tenth of 1 percent of their annual operating revenue. Now, only commissioners can be fined.

While Fasano's bill is on the fast track in the Senate, other bills have been proposed:

Require disclosures. Rep. Mark Pafford, D-West Palm Beach, filed a bill to require individuals who comment at PSC hearings to disclose their ties to utilities or vested interests. Pafford cited a Sun Sentinel analysis published in September that found that more than a third of the customers, politicians and business leaders who praised FPL at three South Florida forums on the rate hike had financial or family ties to the company and its employees. Nearly another third who backed the utility had connections to FPL through business and civic organizations.

"It appears FPL had such tentacles into the community…that they were using their influence whether it be a board position or charitable donation to urge folks to get to those hearings," Pafford said.

Fine utilities for poor service. Fasano filed a bill that would require the PSC to create electric service standards and penalties for utilities who fail to meet those standards.

Elect regulators. Fasano and Rep. Tom Anderson, R-Dunedin, have written bills that would require PSC members, now appointed by the governor and confirmed by the Senate, to be elected. Candidates could not accept campaign contributions from utility employees.

Commissioner Nancy Argenziano, a former legislator, said she questions how far lawmakers will go to regulate the PSC and utilities. Legislators get hefty campaign contributions from utilities. "Would utilities still give that kind of money if they can't have influence?" Argenziano asked.

FPL, the state's largest utility, hasn't taken public positions on the bills, but company President Armando Olivera said in a statement that the company supports reviewing and implementing the best regulatory rules from around the country.

"It is in everybody's interest to have the regulatory process operate in a fashion that will restore the confidence and trust of our customers," Olivera wrote, adding that all groups that appear before the commission – including trade organizations – should be subject to the same standards.

During the legislative session, the Senate will weigh whether to confirm Commissioners David Klement and Steve Stevens, utility and commission outsiders chosen by Crist to bring "new blood" to the agency.

And a committee made up of Senators and Representatives will decide in the next few months whether to confirm Public Counsel J.R. Kelly – the state's utility customer advocate who is credited for successfully pushing regulators to shoot down major rate hikes this year – for another two years.

The committee has been criticized for opening the process up to other candidates instead of reviewing Kelly's work and deciding whether to re-confirm him first as was done in previous years.